Online Privacy Bill: Dead in the Water?

A certain segment of mostly liberal New Yorkers are privately cheering the Republican Party’s stunning Election Day successes.

That’s because after two years of sweating out a pro-regulatory environment under Democratic rule, a pro-business, jobs-above-all-else wave has hit Washington, D.C., led by the Republican takeover of the House of Representatives. Swept up in that wave was Rep. Rick Boucher (D-Va.), who suffered defeat on Nov. 2, putting his much-discussed online privacy bill — aka The Boucher Bill — in jeopardy.

The Interactive Advertising Bureau, which has spent the past two years rallying the online ad industry to take the regulation threat seriously, isn’t hiding its pleasure at Tuesday’s results.

“Clearly, the electorate is focused more intently than ever on economic growth, and on helping the businesses that jump-start economic growth,” said IAB president and CEO Randall Rothenberg, channeling his best John Boehner. “Rightly or wrongly, a lot of members who went down yesterday became associated not with growth, but with a fervor for the kinds of unnecessary regulations that impede it.”

Clearly, nobody in the new Republican-dominated House wants to be seen as impeding growth, which could make online ad regulation unpopular. Additionally, the new Congress has an aggressive agenda planned, which could push privacy regulation to the back burner.

However, at least initially, Republicans are vowing that they aren’t about to ignore the numerous privacy issues tied to online advertising. “Millions of people put their information into the hands of Web sites like Facebook, because they believe what they’re told about walls protecting their privacy,” said Rep. Joe Barton, (R-Texas), ranking member of the House Energy and Commerce Committee. “I want the Internet economy to prosper, but it can’t unless the people’s right to privacy means more than a right only to hear excuses after the damage is done. In the next Congress, the Energy and Commerce Committee and our subcommittees are going to find out if Internet privacy policies really mean anything.”

Also likely to take up the privacy mantle is Rep. Cliff Stearns (R-Fla.), who co-authored the Boucher bill, along with Rep. Ed Markey (D-Mass.), also a member of the Energy and Commerce Committee.

The Federal Trade Commission, under the leadership of President Obama-appointee Jon Leibowitz, is also set to release new proposals for privacy guidelines by the end of the month.

But digital media executives, particularly at ad networks, exchanges and data collectors, are likely breathing easier today. They shouldn’t be, argues Dan Jaffe, evp, government relations for the Association of National Advertisers. “People should put the corks back in the champagne bottles,” he said. “Clearly, Boucher’s defeat is going to have an impact in the privacy arena. But it’s certainly not going to end it. Clearly there are high-ranking Republicans who are concerned with this issue.”

Even if the Boucher bill languishes, Jaffe expects several new pieces of privacy legislation to be proposed. He urged the industry to not relent on self-regulation, or risk getting blindsided. “We can very much affect the results,” he said. “It is really in our court.”

And of course, new House Republicans are sure to hear from various consumer advocacy groups — many of which were never crazy about the Boucher bill to begin with. “We’re not going away,” said Jeff Chester, executive director, Center for Digital Democracy. “It’s an issue we’ll have to rebuild some momentum on. But privacy has it’s own kind of political dynamic.”

It’s an issue with bipartisan support, argues Chester. “Privacy appeals to both lefty progressives and Tea Partiers,” he said. “We can appeal to Tea Partiers by talking about the government can collect all sorts of data online.”